Indian telecom operators’ drive to enhance data consumption among mobile users is gaining strong momentum. But monetization efforts are not generating significant impact on their revenue streams.

Bharti Airtel, India’s leading mobile operator, has seen data consumption on its network increasing from about 133 MB to 231 MB per month per subscriber, between September 2012 and September 2013.

Several Indian telecom operators’ ARPU – mainly driven by voice – is around Rs 100 per month. Idea Cellular’s 3G data ARPU increased 23 percent to Rs 109 in the first quarter of fiscal 2014, indicating that data ARPU can further improve.

Bharti Airtel’s 3G subscriber base rose 83 percent to 6.8 million subscribers in the first quarter of fiscal 2014. But are telecom operators making enough money from mobile Internet?

Focus on data network

Dmitry Shukov, chief executive officer, MTS India, said that it will continue to focus on data network expansion in India.

Last month, MTS India announced 3GPLUS network coverage across all its circles of operations. The telecom operator has introduced this high speed mobile broadband network without adding substantial investments in India.

There’s strong demand for data packs among Indian mobile users. A recent PwC report says pre-paid mobile phone users are inclined to migrate to post-paid if they get good data speeds and reliable network across the country. Pre-paid subscribers using internet packs are four times more likely to migrate to post-paid connections. Over 95 percent of India’s 750 million mobile phone subscribers use pre-paid connections.

A joint report by IAMAI and IMRB projects that the proportion of mobile Internet users could jump nearly 50 percent from 87 million in December 2012 to 131 million by March 2014.

Monetize from mobile Internet

Some of the leading telecom equipment vendors have shared suggestions to improve monetization from mobile broadband.

India has skipped several stages to slip into the garb of a mobile-first market that figures among the top ten worldwide.

“A customer-oriented data pricing strategy based on affordability will not only be effective in widening the reach of mobile broadband to users across lower income range groups, but also enhance usage among corporates who might place bulk orders for specialized data plans like BEM, which are currently quite expensive,” said Amit Marwah, head of Technology, India Region, NSN.

Globally, voice revenues are expected to fall below the 60 percent threshold this year, making your average service provider look an awful lot like your average utility—and it’s likely to get worse before it gets better. Operators can expect margins to shrink from the current 30 to 40 percent industry standard to a mere eight to 10 percent over the next five years.

Successful operators will need flexible cost structures and dynamic new revenue streams to remain competitive—and that means they’ll need to invest in innovation. The paradox of huge market opportunity combined with sharply declining margins only tells part of the story: operators also must contend with an increasingly tech-savvy, data-hungry, price-sensitive consumer.

“Though we project significant cost improvements from investment in technologies like 4G LTE, Network Function Virtualization (NFV) and Software Defined Networking (SDN), the competitive environment will cause the price or effective revenue per gigabyte of data to fall even faster,” said Sue Rudd, director Service Provider Analysis, Wireless Networks and Platforms, Strategy Analytics.

“To manage costs aggressively, speed time to market, and improve the customer experience, many operators have stopped viewing managed services as the latest flavor of outsourcing and have begun to see it as essential to the bottom line,” said Alam Gill, senior vice president of global managed services, CSG International.

NSN says local content and application availability will be one of the suggestions to improve mobile broadband monetization. This effort will involve localized content customized to each stakeholder group and offering current and evolving applications, like Evernote and Whatsapp, customized for iOS, Android and Blackberry phones. These applications can be monetized effectively as they are becoming increasingly popular in India.

The third measure involves generating awareness of market opportunities arising from the mobile broadband space for innovators, mobile advertisers, B2B customers and regular users.

It would be effective to cash in on the existing device ecosystem by leveraging evolving concepts like network security and BYOD (Bring Your Own Device), which are being increasingly recognized and adopted by corporates in India.

Enhancing network awareness using tools like CEM (Customer Experience Management), which has recently started to catch steam in mobile networks. Cashing in on the CEM space in particular will give early adopters a head start over later entrants, said Amit Marwah of NSN.

According to recent industry estimates, more than 40 million users in India access the Internet through their mobile phones which are expected to increase upto 300 million by 2015. With this strong growth, India is in a phase to develop the strong internet mobile ecosystem.

With strong uptake of mobile internet, and the rollout of 3G services, there is need for competitive pricing models to enable mobile broadband penetration. While 3G services are gaining the momentum, those are still not subscribed by many due to costly nature of offerings, according to CA Technologies, an IT vendor for telecom operators.

Being a consumer centric industry and highly dense market, service providers are need to be innovative to become a preferred service provider for the customers. Innovative schemes, combo offers and cross industry collaboration can enhance the uptake of mobile broadband services in India.

Reliance Communications’s scheme for iPhone 5c is one of the tools to improve revenue streams. Though the success of the scheme remains to be seen, the offer was compelling enough to gain the attention.

With number portability ready to be rolled out across circles, service providers must look towards creating a healthy relationship with existing users due to the fact that mobile penetration in India reaching to its thresh hold limits, industry is expecting the next phase of growth will be driven by VAS and internet data users on mobile platforms. Special offers, discounted plans, etc will offer an opportunity to retain profitable customers, said CA Technologies.

Four trends are driving new service models: personalization, simplicity, open ecosystems, and casual usage. The success of these models depends on a deep understanding of subscribers, service focused on customers rather than devices and the ability to personalize and add value to over-the-top (OTT) applications. Gaining this level of insight requires service providers to make a fundamental shift from being “network providers” to “service and content enablers.”

Service providers have a unique opportunity to become service and content enablers. By unleashing network and subscriber intelligence using performance, policy, and subscriber data management capabilities, they can accelerate the monetization of mobile broadband services. New services that are personalized, centered on the customer rather than the device, and leverage casual usage and loyalty add value to open application ecosystems and create a path to drive revenue growth and greater service adoption.

picture source: superiormediasolutions.net